The 17 Million Dollar Tip

by WilliamV .

Labaton Sucharow’s SEC Whistleblower Practice, the first law firm in the United States to focus on representing whistleblowers, proudly announced that one of their clients was recently awarded $17 million for information that brought securities law violations to light. The award is the second-largest amount given to a whistleblower since the Dodd-Frank Act’s whistleblower rewards program began six years ago. The anonymous person gave the Securities and Exchange Commission (SEC) the tip though Labaton Sucharow LLP, which led to the high dollar sanctions against a leading firm in the financial services industry. According to SEC whistleblower attorney Jordan A. Thomas, other employees at the financial services firm kept quiet; only his law firm’s client had the courage to speak up and prevent investors from further harm. His or her courage was well rewarded.

Jordan A. Thomas of the law firm Labaton Sucharow LLP also represented the first public company officer to obtain a monetary incentive for furnishing the SEC with a tip about wrongdoing.

Whistleblower assistance is a valuable tool for the SEC, which is why individuals, or several people acting jointly, may receive 10 to 30 percent of sanctions totaling $1,000,000 or more. Swift action by the SEC minimizes harm to the market and to investors, which is why the SEC pays higher monetary incentives to tipsters who have original, credible information that they promptly report. Individuals who delay reporting possible violations may have their reward reduced. Prompt assistance if the SEC needs more information may increase a person’s reward, although rewards never exceed 30 percent. Monetary rewards are paid from the Investor Protection Fund established by Congress. Individuals who are concerned that they are ineligible for a whistleblower reward should consult an attorney. There are a number of regulations governing who is eligible for a reward and exceptions to the various regulations.

Although the SEC has not publicly named whistleblowers, the only way to make an anonymous report is through an SEC whistleblower lawyer. An attorney specializing in securities law may also help his or her client draft an easily discernible submission that contains sufficient information for the SEC to act.